1 June 2010
XTRACT ENERGY PLC
("Xtract" or the "Company")
Investment Update - Extrem Energy AS
Further to the announcement made on 29 April 2010, Xtract Energy Plc ("Xtract" or "The Company") provides the following update on current and future operations of its Turkish business Extrem Energy AS ("Extrem").
The drilling rig was mobilized back to the Sarikiz-2 well site in early May in order to conduct a work-over sequence at Sarikiz-2 to be followed by the installation of a down-hole pump to increase production potential from the well. Pump installation and commissioning activities are in progress. Further updates will be provided as appropriate.
Following the drilling of Sarikiz-3, Extrem has begun a review of the geological model and future plans for the licence area. Additional seismic and geo-chemical data originally intended to help locate well Sarikiz-4 is available to the review. Extrem continues to have confidence in the potential of the source rocks and the existence of a working petroleum system in the area.
Licence Renewal - Siraseki
In order to manage its cash flows and to provide time for additional seismic to optimize well location for well Menekselik-1, Extrem has decided to defer the well and to re-apply for the Siraseki licence. Further updates will be provided as appropriate.
Appointment of Mr Emir Safa
Xtract is pleased to advise that Mr Emir Safa has been appointed to the board of Extrem as its second nominee director. This establishes joint control of the board, in line with joint ownership established through the Company's increase in its share-holding to 50% in February 2010. Mr Safa, aged 42, is a Turkish national and a Certified Public Accountant. His career has involved holding a number of senior finance positions with several international firms with operations and partnerships in Turkey.
Peter Moir who was recently appointed as a director of Xtract is now leading the Company's technical interactions with Extrem and with our partners Merty Energy.
The above information has been reviewed and approved by Ongun Yoldemir, Managing Director of Extrem, who has a masters degree in geological engineering and worked as an explorationist in the oil and gas sector in the Middle East, Kazakhstan, Azerbaijan, and North Sea, has over 28 years' experience in the resource and energy sector and is a member of the American Association of Petroleum Geologists, European Association of Geologists and Engineers, the Society of Exploration Geophysicists and several related Turkish institutions.
Xtract holds 50% of the equity of Extrem through a wholly-owned subsidiary.
Enquiries please contact:
Andy Morrison, CEO
+44 (0)20 3205 1148
Cenkos Securities Plc
+44 (0)207 397 8900
+44 (0)131 220 6939
About Xtract Energy
Xtract identifies and invests in a diversified portfolio of early stage energy sector technologies and businesses with significant growth potential. The Company aims to work closely with the associated management teams to achieve critical project milestones, to finance later development stages, and to build and crystallise value for all shareholders and partners.
For further information on Xtract please visit www.xtractenergy.co.uk
A short description of the principal assets of Xtract is set out below. These assets are either held directly or through wholly owned subsidiaries of the Company.
Extrem Energy AS ("Extrem Energy")
Extrem Energy is an exploration and production joint venture with Merty Energy of Turkey. The JV's aim is to create a new medium-sized oil and gas exploration and production business, initially focused on Turkey where Merty Energy has particular experience and expertise. Extrem Energy has a portfolio of licence interests including the high potential prospect at Candarli Bay in south-west Turkey. Xtract owns 50% of the issued share capital of Extrem Energy.
Elko Energy Inc. ("Elko")
Elko is a Canadian registered oil & gas exploration company which has interests in exploration and production licences in the Danish and Dutch North Sea. Its major asset is in the Danish North Sea; an 80% interest on 26 offshore blocks in a 5,400 sq km exploration and production licence close to the prolific Central Graben oil field. Technical work indicates the potential for significant reserves. Elko also holds a 60% operating interest in gas-bearing license blocks P1 and P2 in the Dutch North Sea. Xtract owns approximately 50.0% of Elko's issued share capital.
Zhibek Resources Ltd ("Zhibek Resources")
Zhibek Resources is an oil and gas exploration and production company which has a 72% interest in the Tash Kumyr exploration licence in the Kyrgyz Republic. Xtract has entered a farm-out agreement to fund a seismic and drilling programme for 2008-10. Xtract owns 25.0% of the issued share capital of Zhibek Resources.
Xtract Oil Ltd ("XOL")
Xtract's wholly owned subsidiary, XOL, is focused on the development of the Company's oil shale resources in Australia and the technology for oil extraction from oil shale resources. Xtract has oil shale exploration rights over mining tenements in the Julia Creek area of Queensland. In addition to evaluating third party technologies, XOL has been developing proprietary technology for the commercial extraction of liquid hydrocarbon products from oil shale.
Xtract Energy (Oil Shale) Morocco SA ("XOSM")
XOSM is a joint venture with Alraed Limited Investment Holding Company WLL, a company controlled by His Highness, Prince Bandar Bin Mohd. Bin Abdulrahman Al-Saud of Saudi Arabia. XOSM has signed a Memorandum of Understanding with the Office National des Hydrocarbures et des Mines for the purposes of evaluation and possible development of an oil shale deposit near Tarfaya, in the south west part of Morocco. Xtract currently holds 70% of the joint venture.